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Celestica Announces Q3 Results

TORONTO — {complink 987|Celestica Inc.}, a global leader in the delivery of end-to-end product lifecycle solutions, today announced financial results for the third quarter ended September 30, 2010.

Third Quarter and YTD Results
Revenue for the quarter was $1.55 billion, compared to $1.56 billion in the third quarter of 2009. GAAP net earnings were $35.4 million, or $0.15 per share, compared to GAAP net loss of ($0.6) million, or $0.00 per share, for the same period last year.

Adjusted net earnings for the quarter were $46.3 million, or $0.20 per share, compared to $44.3 million, or $0.19 per share, for the same period last year. The term adjusted net earnings is a non-GAAP measure defined as net earnings before stock-based compensation, amortization of intangible assets (excluding computer software), restructuring and other charges, and gains or losses related to the repurchase of shares or debt, net of tax adjustments and significant deferred tax write-offs or recoveries. Detailed GAAP financial statements and supplementary information related to adjusted net earnings and other non-GAAP measures appear at the end of this press release.

For the nine months ended September 30, 2010, revenue was $4.65 billion, compared to $4.43 billion for the same period in 2009. GAAP net earnings were $55.2 million, or $0.24 per share, compared to $23.9 million, or $0.10 per share, for the same period last year. Adjusted net earnings for the nine months ended September 30, 2010 were $137.7 million, or $0.59 per share, compared to $109.0 million, or $0.47 per share, for the same period in 2009.

Third Quarter Results Compared to Guidance
The company's revenue of $1,547 million and adjusted net earnings of $0.20 per share for the third quarter of 2010 were at the low end of the company's published guidance, announced on July 23, 2010, of revenue of $1.55 billion to $1.65 billion, and adjusted net earnings per share of $0.20 to $0.24.

“Celestica's third quarter revenue and inventory were impacted by some demand changes late in the quarter,” said Craig Muhlhauser, President and Chief Executive Officer, Celestica. “Despite this volatility, we delivered consistent operating margins, strong free cash flow, ROIC greater than 20% and continued operational excellence in support of our customers.

“Our fourth quarter outlook reflects strong sequential revenue growth of approximately 15% at the midpoint of our guidance, fueled primarily by recent program wins in our server and consumer end markets and a stable demand forecast for the balance of our customer portfolio.”

Celestica Share Repurchase Plan
During the third quarter, the company paid $37.3 million to repurchase for cancellation approximately 4.7 million subordinate voting shares. The share repurchases were part of the company's Normal Course Issuer Bid (NCIB), approved by the Toronto Stock Exchange in July of 2010, which allows the company to repurchase, until August 2, 2011, up to approximately 18 million, or 9%, of its subordinate voting shares on the open market or as otherwise permitted subject to the normal terms and limitations of such bids. During the quarter, the company also paid $11.1 million to purchase 1.3 million shares for employee equity-based incentive programs. The total number of subordinate voting shares which may be repurchased for cancellation under the NCIB is reduced by the number of subordinate voting shares purchased for employee equity-based incentive programs. At September 30, 2010, approximately 12.0 million shares may be repurchased under our NCIB. Fourth Quarter of 2010 Outlook
For the fourth quarter ending December 31, 2010, the company anticipates revenue to be in the range of $1.70 billion to $1.85 billion, and adjusted net earnings per share to be in the range of $0.20 to $0.26. The company expects a negative $0.05 to $0.12 per share (pre-tax) impact on a GAAP basis for the following items: quarterly stock-based compensation, amortization of intangible assets (excluding computer software) and restructuring charges.

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